By James Langton
(August 23 – 12:25 ET) – Bank of Montreal executives had to face the music in a conference call with analysts yesterday. BMO profits for the third quarter rose only 1.2%.
After the usual round of perfunctory questions about balance sheet and income statement clarifications, TD Securities analyst, Roy Palmer, tightened the screws on BMO CEO Tony Comper. Palmer pushed for confirmation from Comper that BMO’s executives really believe their results represent good performance.
Comper held his ground. He insisted that the results are good and that the bank is “on track” with its financial objectives. The market obviously don’t think they’re good, Palmer retorted, pointing out that the bank’s stock was had dropped about $2.40.
Comper reiterated that wealth management, along with personal and commercial banking was most responsible for the bank’s profit growth, while poor results in investment banking and its Bancomer unit held down overall results. The private client division reported earnings up 27% in the quarter and 54 % on the year.
Gilles Ouellette, head of the private client division, reported that BMO now has 1,449 financial advisors and hopes to have 1,464 by the end of the year, on target with its plan to add 100 advisors per year.
The new Investment Funds Specialist sales force — BMO’s new in-branch investment division –is up to 321 people. 232 of them are actually specialists. 67 are full-fledged financial advisors, and there are 22 sales managers. Ouellette says it hopes to have 700 people in this group within three years. He’s looking to add 250 new advisors per year.
Goldman Sachs analyst, Heather Wolf, asked Comper about the productivity of the new sales force. While they wouldn’t give specific numbers, Comper and Ouellette, reported that although they have only been operating since January. Further, said Comper, their sales targets, productivity is ahead of expectations and they remain “optimistic” about the strategy.